American Consumers Newsletter

by Cheryl Russell, Editorial Director, New Strategist Press
June 2008

Trapped in Gasoline Ghettos

1. Hot Trends:TRAPPED IN GASOLINE GHETTOS
2. Q & A:HOW MANY USE PUBLIC TRANSPORTATION?
3. Cool Research Links:MORTGAGE PROBLEMS, EATING AND DRINKING
4. New from New Strategist:A TO Z GUIDE TO AMERICAN CONSUMERS
5. Updated Editions:AMERICAN ATTITUDES AND AMERICAN GENERATIONS

 

1. Hot Trends

Trapped in Gasoline Ghettos

OK, this is bad. The rapid rise in the price of gas is turning the nation’s far-flung rural and suburban areas into gasoline ghettos, locking millions of Americans into houses they cannot sell, far from their jobs, with little hope of escape.

Even before prices soared, gasoline consumed a large portion of the household budget. In 2006–the most recent year for which there is household spending data–gasoline ranked sixth among items on which the average household spends the most. Back then, the average price of a gallon of gas was less than $3.00. Those were the good old days. With gasoline now above $4.00 a gallon, it is likely the fourth most costly item in the household budget, behind only Social Security deductions, mortgage interest (or rent), and car payments.

This is worse than ouch. Gasoline is the blood supply of the sprawling American lifestyle. Here are the facts: most of us drive to work, and three out of four workers drive to work alone. The average commuter spends 25 minutes getting to his job. Many are in the car much longer. Twenty-one percent of workers live 20 or more miles from their place of work. Among the unlucky workers who live in newer homes (built in the past four years), an even larger 29 percent live at least 20 miles from their work, according to the American Housing Survey.

Those newer homes are the epicenter of the housing crisis because of their distance from jobs. According to an analysis (pdf download) by David Stiff, chief economist for Fiserv Lending Solutions, single-family home prices are falling the most in areas farthest from employment centers. “Because of sharp increases in gasoline prices, living closer to work has become an even more important consideration in the location decisions of homebuyers,” says Stiff. He maps housing price changes from the price peak through the first half of 2007 in two metropolitan areas, showing how prices in Los Angeles and Boston have fallen the most in the outer rings. The future doesn’t look bright either. “When combined with large inventories of unsold housing on the edges of urban areas, this shift in preferences will mean that prices for homes in outlying neighborhoods will continue their more rapid decline and will be slower to rebound when housing markets finally start to recover.”

On top of this bad news, most of the millions living in gasoline ghettos have no alternative but to drive. Only 54 percent of households in the United States have access to public transportation, according to the American Housing Survey. Among homeowners, the figure is a smaller 47 percent. Among homeowners in newer houses–the houses in exurban rings–just 27 percent have public transportation in their area.

If we are lucky, the spike in gasoline prices is only a bubble, which will deflate once speculators withdraw from the market, or the summer driving season ends, or a new administration is in the White House. The bursting of an oil price bubble will give us time to prepare for the permanent era of expensive gasoline. We will have time to build more efficient vehicles, encourage people to live closer to job centers, and invest in public transportation. If we are not lucky, then we have run out of time, and we are about to feel the fury of all those trapped many miles from stores, schools, and jobs.

By Cheryl Russell, editorial director, New Strategist Publications
If you have questions or comments about the above editorial, e-mail New Strategist at demographics@newstrategist.com.

 

BET YOU DIDN’T KNOW

Percentage of Americans who favor requiring car makers
to manufacture cars that use less gasoline: 92.

 

2. Q & A

How Many Use Public Transportation?

Billions and billions. Public transit ridership reached an all-time high of 10.3 billion trips in 2007, according to the American Public Transportation Association. This is the highest level in 50 years, brags the APTA. Not to rain on their parade, but the U.S. population is also larger than ever, so it is only natural that the use of public transportation should be up. A more promising APTA statistic is this: the use of public transportation has grown 32 percent since 1995, more than double the 15 percent gain in population.

Still, the percentage of Americans who use public transportation is pitifully small. Overall, only 5 percent of the nation’s workers use public transit to get to work, according to the 2006 American Community Survey. There is a good reason for this lack of use. Only 54 percent of households in the United States have public transportation available in their area, according to the American Community Survey. Narrow the focus to homeowners, and the numbers are even smaller. Only 47 percent of homeowners have access to public transportation. The figure is a higher 69 percent for renters, who are more likely to live in urban areas.

These numbers were collected a few years ago and are undoubtedly higher today. But not much higher. It takes years to get public transportation systems up and running. And we have another problem. The United States is the third largest country in the world. To make public transportation work here will require an enormous financial commitment at a time when the economy is already severely stressed. The way gasoline prices are rising, however, we may have no other choice.

By Cheryl Russell, editorial director, New Strategist Publications
If you have any questions or comments about the above Q & A, e-mail New Strategist at demographics@newstrategist.com.

 

BET YOU DIDN’T KNOW

Hours per day Americans spend traveling
from one location to another: 1.24.

 

3. Cool Research Links

To keep up-to-date on ever-changing demographics and lifestyles, check out these useful links.

Mortgage problems
Usually it takes academics years to analyze a problem, releasing their findings long after the problem is solved. But studies coming from the National Bureau of Economic Research are different. Its researchers are on top of current events, publishing insightful analyses well before we are out of the woods. The most recent example is “The Consequences of Mortgage Credit Expansion: Evidence from the 2007 Mortgage Default Crisis,” by Atif Mian and Amir Sufi (NBER Working Paper No. 13936).

In their study, the authors examine zip code data to determine the factors behind the housing bubble and default crisis. Their analysis reveals a rapid expansion in the supply of credit between 2001 and 2005 in zip codes that had experienced high mortgage application denial rates in 1996. Growing prosperity, the authors say, does not account for the credit surge in those areas. In fact, the economic status of the zip codes actually declined over the decade. But financial institutions no longer cared about the economics since they were busy selling their mortgages to clueless investors (including other financial institutions). Consequently, millions of homebuyers with questionable credit flooded the housing market, driving up housing prices and sending default rates to record levels in 2007. “Our results suggest that moral hazard on behalf of originators selling mortgages is a main culprit for the U.S. mortgage default crisis,” the authors conclude.

Who Eats the Most?
If you think the overweight should spend less time eating, then think again. This Department of Agriculture report, based on data from the American Time Use Survey, shows that the time Americans spend eating and drinking does not vary much by weight. In fact, the obese (body mass index of 30 or higher) spend slightly less time eating and drinking during an average day (123 minutes) than those whose weight is normal (128 minutes). Eight percent of the population are what the Department of Agriculture calls “constant grazers,” or people who spend an inordinate amount of time eating and drinking–at least 4.5 hours per day. Most of that time is spent sipping beverages. Coffee anyone? The peak time for eating and drinking is between noon and 1 p.m., when 42 percent of Americans eat and drink.

 

BET YOU DIDN’T KNOW

Women aged 65 to 74 spend the most time cooking.

 

4. A to Z Guide to American Consumers

Need a research assistant? Here is one that is reliable and does not have to be added to the payroll: The A to Z Guide to American Consumers: Quick Links to Free Demographics, to be published next month by New Strategist. For only $59.95–or an even better $49.95 if you opt for the handy electronic version–you can get the demographic information you need in just a few keystrokes. The A to Z Guide is your quick link to free information about topics ranging from Adoption to Zip Code Demographics. Plus, there is a contact list of 54 major surveys or data collection efforts ranging from the American Community Survey to the Youth Risk Behavior Surveillance System that provide demographic information about the U.S. population, all available for free or a nominal charge.

(ISBN 978-1-933588-97-1) Just $49.95 for the electronic version, which can be downloaded today at www.newstrategist.com, or order the hard copy ($59.95) available in June. To see the table of contents, sample pages, and more, go to www.newstrategist.com.

 

5. New Editions of Best Sellers

American Attitudes

Researchers who want to explore Americans’ changing attitudes can rejoice: the new fifth edition of American Attitudes is finally here. American Attitudes: What We Think about the Issues That Shape Our Lives reveals what the public thinks about topics ranging from premarital sex to global warming, how Americans feel about their money and their marriages, what our hopes for our children are, how often we socialize and with whom, our religious beliefs, political leanings, and working conditions. It shows those answers by the demographics that shape perspective–sex, age, race, and education. American Attitudes also compares attitudes in 2006 with 1996, examining how opinions have–and have not–changed during those 10 years. Please note that the electronic version of this title includes links to spreadsheets of the book’s 321 tables.

(ISBN 978-1-933588-93-3) Just $79.95 for the electronic version, which can be downloaded today at www.newstrategist.com, or order the hard copy ($89.95), which will be available in June. To see the table of contents, sample pages, and more, go to www.newstrategist.com.

American Generations

Joining the lineup of updated titles is the long-awaited sixth edition of American Generations: Who They Are and How They Live, a superior resource for researchers who want to quickly and easily compare and contrast the five living generations–Millennial, Generation X, Baby Boom, Swing, and World War II. Opening with an in-depth overview of the demographics of the generations, American Generations’ 12 chapters examine attitudes (a newly added chapter) education, health, housing, incomes, labor force, living arrangements, population, spending, time use (a newly added chapter), and wealth. Please note that the electronic version of this title includes links to spreadsheets of the book’s 273 tables.

(ISBN 978-1-933588-95-7) Just $79.95 for the electronic version, which can be downloaded today at www.newstrategist.com, or order the hard copy ($89.95) available in June. To see the table of contents, sample pages, and more, go to www.newstrategist.com.